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17 Nov 2011 07:00
FRENCH CONNECTION GROUP PLC
Interim Management Statement
17 November 2011
French Connection Group PLC is announcing its Interim Management Statement covering the period from 1 August to 16 November 2011.
Revenue in our UK retail stores was good during the early part of the third quarter, but then slowed considerably following the end of the sale period. The UK fashion shopper continues to act very cautiously and, in addition, the unseasonably warm weather has had a negative impact on sales of our winter ranges. As a result, like-for-like retail revenue in our UK/Europe retail business is disappointing, having fallen by 9.5% year on year over the last three months. Despite this we have maintained our full-price stance throughout the Autumn/Winter season. Based on our experience in the summer sale earlier in the year, we expect that revenue in December and January will be stronger than last year, although it is unlikely that the shortfall so far will be fully recovered.
The UK/Europe wholesale business continues to perform well, with revenue 6% ahead of the prior year in the period. Wholesale forward orders for the Summer 2012 ranges in UK/Europe remain well ahead of last year and this will boost revenue towards the end of the financial year. This also provides confidence in our new ranges and supports our trading expectations for the new season.
In North America, retail trading has been broadly flat on last year in both revenue and gross margin. Wholesale revenue has been well ahead and overall the trading result for the North America region continues to run well ahead of last year.
Our joint ventures in Asia and our brand licensing income both continue to perform well.
Group profit before tax for the third quarter was £1.8 million lower than the same period and the same businesses last year, all due to the poor volumes in UK/Europe retail. While we aim to recover as much of this shortfall as possible in the fourth quarter, it is unlikely now that we will achieve our original expectations for the full year.
The Group continues to operate with a strong balance sheet and no debt. While the recent sales performance has had the consequential effect of increasing inventory levels, we are confident that this will be cleared through our normal channels.
Other than as detailed above in this Interim statement, there have been no material events or transactions in the period from 1 August to 16 November 2011.
Enquiries:
Roy Naismith/Neil Williams French Connection +44(0)20 7036 7206
Kim Fletcher/Catriona McDermott Brunswick +44(0)20 7404 5959
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